Cash remittances from foreign Filipino workers (OFWs) rose in February, albeit at the slowest pace in 13 months, reflecting the resurgence of the coronavirus 2019 (COVID-19) infection in many countries.
Cash remittances rose 1.3% to $ 2.509 billion in February from $ 2.46 billion a year earlier, according to data released on Monday by Banco Central NG Polypinus (BSP).
This is the smallest monthly flow in three months or since pouring $ 2.502 billion in November.
February remittance growth was the slowest since a 1.7% decline in January 2021.
“Growth in private remittances was slow in February 2022, however, the resurgence of covid cases worldwide was 2.5% higher than in January due to the restoration of restrictions on OF (foreign Filipino) host countries and the Philippines. The BSP said.
In February, remittances to land-based workers rose 1.2% to $ 2.007 billion, while remittances to sea-based workers rose 1.6% to $ 501 million.
“(February remittance data) Ukraine has not yet captured any effects of the invasion that could affect remittances from host countries close to Europe and Ukraine and Russia,” said Ruben Carlo, chief economist at UnionBank in the Philippines. Asuncion says 6
Russia launched an invasion of Ukraine on 24 February.
However, Mr Asansion said the protracted Russia-Ukraine war could be a pull on the growth of remittances, especially for OFWs in some European countries.
The central bank says both Russia and Ukraine have the lowest contribution to total remittance inf.lows However, it warns that a war that involves Western countries, such as Europe and the United States, which are major sources of remittances, could have a major impact on the flow of money.
ING Bank-NV Manila Senior Economist Nicholas Antonio T. Mappa said the slower growth in remittances in February could be due to the devaluation of the peso vs. greenback.
“A weak peso allows OFW to send home a small amount of dollars to cover the peso costs. In a weak local currency environment and (abundantly) fixed peso costs, less pressure on OFWs to send more remittances home in dollar terms, ”said Mr. Mapa.
“For example, now that the peso is at P52 per dollar, if an OFW has to send home enough dollars to pay for P50,000-tuition, he will have to send less in dollars in terms of tuition ($ 961). Unlike last year, When the peso was at P48, OFW had to send 1,042, ”he added.
Due to the continued devaluation of the peso against the US dollar, Mr. Mapa said remittances are unlikely to arrive.FThe following trade gaps will expand.
Money sent home by Filipino immigrants fi17 5.177 billion in the first two months of 2022, up 1.9% from $ 5.078 billion in the same period in 2021.
The expansion of cash remittances between January and February was mainly driven by INFLower than the United States, Japan, and Singapore.
For the January-February period, the United States, Singapore, Saudi Arabia, Japan, the United Kingdom, the United Arab Emirates, Canada, Taiwan, Qatar, and Malaysia were the 10 largest sources of remittances. Of these countries accounted for 79.6%FLow
Meanwhile, private remittances, which includeFKind of low, rose 1.2% to $ 2.793 billion in February. Individual remittances rose 1.9% to ৭ 5.859 billion fiThe first two months of 2022.
Mr Asuncion, of UnionBank, said the resumption of the economy would lead to higher housing costs for OFW in the coming months.
“It’s possible that OFWs are already considering the cost of returning to school, even now as soon as possible, especially if face-to-face schooling can be restored soon,” Mr Asuncion said.
BSP expects remittances to increase by 4% this year. – LWTNoble